Short Term Personal Loan To Fill An Income Gap
Many families are turning to a short term personal loan to address their cash-flow problems.
Thousands of families are suffering during challenging economic times. Making ends meet when the price of electricity, gas, even food is on the rise can be very difficult.  While short-term loans often meet their immediate needs, the lingering effects of these payday loans can continue for many months.
Many consumer advocates are waving red flags over these so-called payday loans. Some lenders have been accused of exploiting the pensioners and the poor by making loans with high interest rates and fees which only serves to worsen their situation. In many cases, the only way the borrowers can survive month-to-month is through repeated borrowing of ever escalating amounts, further adding to their financial burden.
The Good News
Short term personal loans have many positive characteristics.
- They are relatively easy to obtain – Compared to secured or unsecured bank loans, the process to obtain short term loans is quick and easy. Most applicants find they can apply for the loan and have proceeds in less than an hour.
- Loan amounts are flexible – Typically there are no minimum amounts when applying for short term personal loans. Other long term options often require a minimum loan amount that is much more than you may need.
- Repayment terms are short - This allows you to repay the debt quickly and avoid unnecessary interest and expense and can add favorable history to your credit file.
The Not-So-Good News
While there are several positive attributes to short term personal loans, they can be devastating to your financial situation if they are not handled properly and in a timely manner. Some of the dangers of these loans include:
- Very high interest rates – Interest rates as high as 48% monthly or 900% annually have been reported. This can lead to the interest costs of the loan being much more than the original loan amount.
- Administration Fees - In some jurisdictions lenders are allowed to add loan administration fees. While these are often reasonable, they can raise the total repayment amount.
- Overall cost of the loan – High interest rates and arbitrary administration fees can make the situation worse for families already struggling to make ends meet.
If you are considering a payday loan, be sure to do you homework and find the right lender and the right loan for your needs. The total expense of these loans is high, especially compared to the standard rates of traditional loans and can become too much for some families to handle. Doing your homework can go a long way toward helping you choose the right amount, loan, and lender. In the end, these loan instruments can be a salvation for a family in need and managed correctly they will not become a terrible nightmare.
Should You Get A Short Term Personal Loan
Using a short term personal loan to pay everyday living expenses can be very dangerous. Finding a way to reduce those expenses can be a much better long term strategy for most. On the other hand, using proceeds from a payday loan to cover one-time or unexpected expenses like car or home repairs can be just what the doctor ordered.
Featured Personal Loans
| Personal Loan | Details | Min Interest Rate | Min Comparison Rate | Min Loan Amount | Min Loan Terms | Apply Fee | |
|---|---|---|---|---|---|---|---|
 ME Bank Personal Loan | A low rate personal loan from ME Bank with no application fee for a limited time. | 13.59% | 13.81% | $5000 | 1 year | $0 |   |
 Aussie Personal Loan | A smart way to consolidate your bills to save time and money so you can pay for your holiday, a wedding or renovate the house. | 13.90% | 14.84% | $3000 | 1 year | $199 | |
 Sugar Money Personal Loan | Fixed rate personal loan with flexible options to get you funds when you need it. | 13.99% | 15.00% | $3000 | 2 years | $250 | |
 bankmecu Personal Loan | A convenient and fast way to purchase a car or debt consolidation with affordable rates and fees. | 13.49% | 14.55% | $1000 | 1 year | $150 | |
Related posts:
Ask A Question